COVID-19 has affected many businesses in a multitude of ways, the government have recently announced additional help for these challenging times. Below are details on the Job Support Scheme if a business is forced to close due to COVID-19 restrictions and information on the Job Retention Bonus for employers.

Job Support Scheme

The government have announced the Job Support Scheme for firms who are required to close due to COVID-19 Restrictions.

Firms whose premises are legally required to shut for some period over the coming winter as part of local or national restrictions will receive grants to pay the wages of staff who cannot work.

The government will pay 2/3 of each employee’s salary, capped at £2,100 per month.

Employers are not required to contribute towards employees’ wages but will be required to cover the costs of national insurance and pension contributions.

Employers are only allowed to make the claim while they are subject to restrictions and employees must be off work for seven consecutive days to qualify.

The scheme will commence on 1st November 2020 and run for six months with a government review in January 2021.

Payments to businesses will be made via a HMRC claims service that will be available from early December. Employees of firms that have been legally closed in the period prior to 1st November are eligible for the Coronavirus Job Retention Scheme.

Job Retention Bonus

The Job Retention Bonus is a £1,000 one-off taxable payment to an employer, for each eligible employee that you furloughed and kept continuously employed through to 31st January 2021. Please note you do not have to pay this money to the employee in question.

The claim will be available between 15th February 2021 and 31st March 2021.

You are able to make a claim for each eligible employee; in order to be an eligible employee the individual must meet the following criteria:

  • made an eligible claim under the Job Retention Scheme
  • individual was kept continuously employed from the end of the claim period of your last Job Retention Scheme claim through to 31st January 2021
  • individual is not serving a contractual or statutory notice period for employment on 31st January 2021 (this includes people serving notice of retirement)
  • individual was paid an amount in each relevant tax month which was enough to meet the Job Retention Bonus minimum income threshold (see below)

To meet the minimum income threshold the employer must pay an employee a total of at least £1,560 (gross) throughout the tax months:

  • 6th November to 5th December 2020
  • 6th December 2020 to 5th January 2021
  • 6th January to 5th February 2021

The employer must pay the employee at least one payment of taxable earnings (of any amount) in each of the relevant tax months.

Please note, HMRC will not pay the bonus if the business made an incorrect Job Retention Scheme claim and your employee was not eligible for the Job Retention Scheme

Tax treatment of the Job Retention Bonus

The Job Retention Bonus must be treated as income when you calculate your taxable profits for Income Tax and Corporation Tax purposes.

Should you have any queries or questions in respect of the above, please reach out to your usual Arnold Hill & Co contact, call our mainline on 0207 306 9100 or email our general address – info@arnoldhill.co.uk

The information in this article is believed to be factually correct at the time of writing and publication, but is not intended to constitute advice.  No liability is accepted for any loss howsoever arising as a result of the contents of this article. Specific advice should be sought before entering into, or refraining from entering into any transaction.